Regulation of the Financial Sector

Abstract

No analysis of financial markets and institutions can be complete without an examination of the regulatory environment in which they operate. Not only does regulation have a major impact upon the operation and developments of financial markets, regulation itself is often revised and adjusted in response to changes in market structure, financial market developments, new financial instruments and the occasional financial scandal or crisis. Effective regulation is seen by the authorities not only as a means of exerting some degree of control over the markets, but also as a means of maintaining confidence and stability in the financial system.